Gordon Brown will have to be dug out by the taxpayer

Gordon Brown has enhanced his international reputation and saved himself from
Labour plotters who had been itching to depose him.

Meanwhile the economy over which the prime minister has presided for 11 years is heading down fast. But for now the mess is obscured by the drama of Brown’s great escape for the financial system.

Beyond the Houdini act, conditions in the UK economic camp have become far worse. Britons are going to be locked into recession for much of 2009. They won’t have enough to occupy them. Unemployment is going to head well over the 2 million mark.

Even when released from recession, Britons will find themselves burdened. The budget disaster began before the recent crisis, with the fiscal surplus Labour built in its first years in office squandered in subsequent years.

Now the loss of buoyant home sales taxes, and higher inflation and unemployment are likely to cause the budget deficit to double to more than 4% of GDP this fiscal year, and to a still worse level in the next one.

The government’s debt, meanwhile, is exploding. The national statistics office added £85bn to the public debt for Northern Rock. The nationalisation of Bradford & Bingley and the £50bn invested in bank shares may add a further £90bn, taking net debt to GDP to 50pc - far above Brown’s self-imposed 40pc ceiling. If the liabilities of RBS were also taken on board, the debt figure would spiral still higher.

The government may claim these additions are temporary. The banks and shares can subsequently be sold off. That will have to be done successfully so as to bring much-needed new windfalls. The government racked up its deficit despite the housing bubble and is now bailing out banks for the housing bust. It’s the taxpayer that’s going to have to dig Gordon out.